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tv   Squawk on the Street  CNBC  March 18, 2010 9:00am-11:00am EDT

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data -- consumer price index flat, proof price inflation not a problem for now. very interesting number when it comes to inflation. we'll have details from steve in 30 seconds. >> plus, weekly jobless claims falling slightly last week for the third straight week, but we're still not at a point where we'll see job gains. and fedex came in better than expected. it hasn't really helped the stock so far, but you know, interesting, mark, they came out and said they're going to put some of those employee benefit programs that had been cut during the crisis, they're going to start putting them back, which big picture for the economy may be a positive that would outweigh any hit to profits that might mean for fedex. >> one would hope so. futures right now are blah. i mean, really blah. right at fair value, no real impetus coming from the futures on the markets at all. >> all right, let's get to bob pisani, start with our market
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reporters. bob? >> and stocks are very overbought, but there's no real sign of deterioration here. interesting important comments from fedex. numbers were much better than expected here, but they talked about as business improving, their costs are going up. they're reinstating some employee compensation program. that's going to put a damper on earnings. that's why the stock is down about 2% here preopen. that's good news, though, good news for people who might be making more money who work for fedex. same situation with nike. their numbers were much better than anticipated. they, too, talked about a 16% rise in general expenses on higher investments, and of course, higher salaries. nike, though, is trading to the up side. guess up 2%. their earnings also better than expectations. we'll talk about these overbrought conditions at 9:30, what it might mean for the next couple days. tradertalk.cnbc.com. mike, how are we looking at the nasdaq? >> good morning, bob. well, we are, at least according to the premarket indicator, looking at a slightly higher open. nasdaq up two days straight now, and so far this month it is up an s&p and dow beating 6.75%.
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we are going to get a lift today from trading in shares of teva pharmaceutical, the world's biggest generic pharmaceutical company. it beat out the world's biggest brand name drug company, pfizer to buy a privately held generic drug company in germany for around $5 billion. 4% higher right now. herman miller, the office furniture maker, missed on earnings. however, it said that new orders are actually up after five straight quarters of going down. nonetheless, the stock is about 2% lower. google and intel reportedly hooking up with sony for some kind of a google tv platform. we've got goldman sachs upgrading shares of broadcom to a buy. they're up 1.8%. and finally, biojen says their new product could hurt sales. let's go to bertha at the nymex. bertha. >> thanks, mike. oil is selling off after two strong days of gains with the dollar moving higher, the euro
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moving lower on continuing concerns about the greek debt situation. so, we're getting that pullback here. inventory numbers yesterday showed that oil supplies are at a high not seen since last august. so, we have plenty of oil. meantime, we will be watching for the nat gas inventories this morning, those due out at 10:30, and we are expecting to see a withdrawal of 28 billion cubic feet. but this morning, ahead of that, we've got nat gas hitting a four-month low with really warm temperatures here in the east coast and the forecast for not much demand for natural gas, at least weatherwise. erin, back to you. >> thanks very much to you, bertha. let's look at the asian trade overnight. there was pressure across the board, not significantly so, though. japan was the biggest decliner for the day. by the way, for the year, the japanese markets beating that in china. in europe, though, we are slightly higher today, and well, at least the buzz here, guy johnson, is that the buzz there is about whether this greek deal is going to happen.
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>> that's all the buzz at the moment. as mark said, stocks are blah today. there's nothing really happening with either side of the flat line, as you can see. let's look at the stoxx 600 with what's happening. we are just into positive territory and just at session highs on the stoxx 600, but the great story is absolutely front and center. this is brinkmanship at its best here in europe at the moment. you've got the greeks saying we're looking at the imf. that's a real possibility for us. the germans seem to be getting on board with that idea. there seems to be some discrepancy about whether or not the greeks are saying we'll go sooner rather than later. there's a big summit coming up between the european leaders in the next few days. that seems to be maybe a pivot point for this story, but certainly, the greeks are playing this card very, very strongly at the moment. dominique strauss-kahn, head of the imf, is in brussels today. he potentially could be a presidential rival to nicolas sarkozy in the next french elections. sarkozy does not see greece going to the imf. he will do everything to make
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sure that that doesn't happen. so, that's a critical element in this story. the politics surrounding the french presidential elections. we are seeing the spread between greek bond yields and german bond yields widening out today, quite significantly as well, and that is having a fairly significant impact on the euro/dollar as well, down for a second day. that's feeding through, it's the commodities trade, too. so the greece story back front and center once again, and the brinkmanship, the politics, everything really coming together into a fascinating story. and we're going to watch this one very, very carefully. mark, over to you. >> thank you very much. i'm down here on the floor with the hardest working man on the floor, warren meyers, official cnbc contributor. i could go on and on. >> how about jayhawks fan? >> where -- are you a fan? >> yes, very much so. >> you went to denson and pepperdine, but you root for kansas? >> absolutely. family loyalties.
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>> you can't root for -- never mind. let's talk about this market. where did all the market go? where did all the volatility go. >> it's awful. especially for people down here on the floor and sitting at the desks with very little to do. it's extremely painful. i don't know where it all went. i think the fact of the matter is you have such a divergence of opinions. you have people that maybe didn't get in at the beginning of this rally a year ago and missed out and are now very skeptical of getting in at these levels. you have people long the stock that maybe did get in and don't necessarily want to sell when they look at market and in the absence of everything else, it keeps ticking higher and their positions get better. i think you have a big divergency and because of that, people are sitting on their hands and not doing anything. >> so what do we do? >> i was hoping for volatility with the triple witching tomorrow, but we usually get that a couple days in advance. >> right. >> we haven't seen any of that. i think you have some fight between 1,150 and 1,175 on the s&p in terms of unwinding of options and futures, but beyond
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that, i think that tug-of-war is going to be over by tomorrow and it's unfortunately going to be a very quiet next couple of weeks. >> oh, goodie, a couple of weeks! >> well, you tell me -- i mean, outside -- >> i don't know anything! >> maybe the health care fiasco can create some, you know, political issues and stir up some feelings, but beyond that, i don't see much coming out of the economic numbers maybe until we get the next big jobs number next month. we've got a little stretch. >> all right. stock up on no-doze. thank you, warren g. meyers. back up to erin. >> wow, warren g. the american bankers' association is lobbying with a full court effort this week. senator richard shelby of the senate banking committee was on "squawk box" this morning. >> unless there are a lot of changes, it will be a lot of republican votes against the bill as it is. but there's always hope that we can put together a bipartisan, substantive bill, and that's why i leave the door open, but i'm
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not sure it's wide open yet. >> for more on that lobbying blitz, let's get to hampton pearson, live in washington. good morning, hamp. >> hey, erin. as you might imagine, the lobbying, in terms of the dodd bill, which seems to be the major play now in reg reform, really the centerpiece of this two-day meeting of mostly community bankers of the american bankers association. a couple things, frankly, they're concerned about -- the provision in the dodd bill that would have most of their banks, the smaller banks, regulated by the fdic and the so-called too big to fail banks regulated by the federal reserve. the other issue really sticking, and it was really the focus of their lobbying effort on capitol hill yesterday, this whole idea of any kind of stand-alone consumer protection authority. >> we just think that to separate consumer protection from safety and soundness is not the way to go about it. we believe that the consumer
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should be protected. we're concerned that this agency could have really overwhelming ability to write rules for banks, telling us what to do. it's another layer of government bureaucracy. >> reporter: now, the other issue that the bankers are talking to their lawmakers about is this perception that they've got lots of money but are holding on to it and are not lending. they say that's a function of, number one, tighter credit requirements, tighter requirements by examiners look eeferg their shoulders and a lot of pressure to preserve capital, but they wanted to get the message out, we're the good guys, we're in the communities, we want to make loans, but we've got our hands tied in some respects. erin? >> thank you, hampton. next, the first installment of "the david faber report" today. >> can't wait to hear what he's got to say. and stocks looking a little weaker off the open, but you know, mark, it's an 18-month high. >> i know! >> so -- >> old saying, never short a dull market.
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this has been dull, but higher. >> exactly, bit by bit. plus, the real state of ceo bonus pay. new numbers this morning on how much the top dogs are bringing in. and go vote in our street poll. will the dow be above 11,000 by month's end? bear in mind that is, what, that is 13 days away. yea or nay, do we get that last 267 points by the end of the month? we're back in two minutes.
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welcome back. the capital markets keep on giving and giving and giving. last week we told you about comerica, of course, doing an offering, able to repay t.a.r.p. as a result, having done so yesterday. hartford insurance group another ficiary of the capital markets, completing a significant offering of stock that will allow it to repay as much as $3.4 billion worth of t.a.r.p. money. a lot of proceeds coming back to the u.s. treasury. the big ones out there still, of course, continue to be aig and gm. nonetheless, hartford insurance, you see yesterday, a very strong day. the stock has been quite strong over the last couple of days on news that it would be repaying t.a.r.p. what did it get done? well, $1.45 billion in common and a $500 million offering in preferred had been completed. they sold about 52.2 million
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shares -- i'm sorry -- yeah, $27.75 each. and again, $500 million in preferred that, by the way, will convert to common in three years time. another example of the willingness of investors to step up both on the equity front, and of course, in the fixed income front, which we'll get to in a minute, allowing these companies that a year ago many would have thought would never be able to get to market with an offering of this type or be in a position to repay their t.a.r.p. funds. it is getting done. a lot of money flowing, by the way, into that stock in particular. that is hartford insurance group. all right, let's also talk about high yield. there was a little bit of a blip, you may recall, that i mentioned back around when the troubles with greece were at their height. the junk market closed down for a couple of weeks. it's back and largely back to where it's been for a number of months now, namely, deals getting done, spreads over treasuries. let's call it at about 600, 650 over. that verses about 1,050 over
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last july, and of course, if you recall, at the height of the crisis, well, you could issue at 18% more than treasuries if you were a junk credit, maybe, but no one was actually doing any issuance, of course, back then. there's a look at the barclays high yield index to give you some sense as to what we're talking about with yields coming down. still, though, when you look back over 25 years, that 6.50% spread is higher than the high yield average. that being said, treasuries are awfully low, aren't they? the effects of 0% interest rates, the positive, the regenerative, let's call it -- many would say there's a lot of negative effects, but the regenerative effects of 0% interest rates being felt across the board. sallie mae does $1.5 billion offering of unsecured bonds, ten years with a yield of about 8%. they went off at 8.25%, given the discount, but you get the picture here. i mean, this is a company that six months ago probably couldn't have issued. by the way, a lot of questions about its business. it is moving to the servicing
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model. that's really what sallie mae is going to be doing, servicing student loans, not making them any longer, running off the book, of course, of business that it already has, but there's still going on in congress right now that could have an impact on their business. but that's how the company is being positioned. certainly, investors expect that. and bombardier, canadian company, makes a lot of those rail cars, $650 million of senior notes due in 2018, the coupon there 7.5% and another $850 million due in '20, coupon there 7.75%. the point again is high yield is back, equity offerings are back, they have been for some time. we'll see if we get any ipos, as you take a look at high-yield issuance over the last year. erin, back to you. >> thank you. david will be back. let's talk a little bit about fedex. we mentioned at the top of the program, we're looking at a lower open. now, part of that is because the company is going to be spending money. now, profits were sharply higher for the quarter. it boosted their forecast for the full year, for the fourth quarter.
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fresh off the conference call, art hatfield, transportation analyst at morgan keegan. art, it seems like people are punishing the stock as they said, guess what, things are doing all right, so we're going to spend money again, reinstating some of these employee benefit cuts and investing in new planes, because people want to ship things. and so, that's going to hurt profits. but isn't it a good sign for the economy? >> it's a very good sign for the economy. and keep in mind that despite these expense headwinds in the fourth quarter, their guidance still is showing an improvement year over year in profitability. at the high end of the range, north of 100%. so, i think they're being cautious and honest about how people should be modeling their numbers going forward, but i think it's a very positive sign. they would not be spending these incremental dollars if the economy was not getting not just a little bit better, but i'd say somewhat significantly better. >> and any indication they gave you of, i don't know, timing or where the strength is or what's being shipped or anything?
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>> you know, i think looking at the numbers, international volumes country to country, transcontinental volumes have picked up substantially. they did say this morning that the recovery is broadening. and so, it is picking up across the board. they're seeing end demand not only picking up from the consumer and from the business entity, but that's causing a restock of inventory. and so, nothing really specific, but just a general improvement in the economy. >> all right, would you buy the stock, art, final word? >> i think today on this pullback, it's a very good opportunity to buy the stock if you believe in what's going on in the parcel industry. fedex and u.p.s. both are creating this global duopoly, and we think that strong pricing from both companies will significantly help profitability over the next couple years. so, yeah, we would be a buyer of the stock today. >> all right, thank you very much. >> you're welcome. >> appreciate it. and we're counting you down to the open. we have our little countdown
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clock. >> yep. >> 10:41 away. >> did you know that clock has been there for years? >> yeah. >> i never knew -- >> simon told me what happened. >> simon pointed it out to me. first time i'd seen it. >> you didn't have to do the math. well, you always did the math right, so who needs the clock? later this morning, the dow stocks that haven't done so well that are showing some signs of life. on the list, oh, our parent company, ge. the dow is the focus of today's street poll. do you think it will hit 11,000, which is 267 points away, before the end of the month? go vote! squawkonthestreet.cnbc.com.
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all right, as we count you down to the opening bell, futures are pretty flat, and there's really no way to call the open here. no big moves one way or the other. neither positive nor negative to the s&p. now we're up 0.75 points. >> let's get the buzz from beyond the big board. san francisco is where steve massocca is, managing director at wedbush securities. he's with us. i feel like it's been a while. maybe you got some vacation. i hope that's the case. anyway, it's good to have you back. what are you looking at today? >> i'm looking at a very quiet opening, and i guess probably the biggest news story out there this morning is greece. it seems to be heating up a little again, and that, obviously, would have negative implications. i think there's a lot of buyers out there right now in the stock market. the market had moved up a lot on
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very little volume. it's almost as if the buyers can't find any stock to buy. they continue to move the market higher, but there's nothing around. it's hard to see what stops the process of the market going higher stopping in the near term, unless it's something like greece. >> all right, well, steve, thank you very much. i wanted to do a follow-up question, but we have breaking headlines right now on the health care bill. john harwood's on the phone. john, what is it? >> reporter: well, erin, house majority leader steny hoyer, in advance of the release of the cbo score of the health bill has said the bill is going to cost $940 billion over ten years and save $130 billion off the deficit. this confirms some reporting i had earlier today from a source on the senate side that said the bill would have, as scored by the cbo, would have more deficit reduction than the senate bill, which was more fiscally conservative. that is good news for the house if they try to convince some of those bluedogs to support this bill and get a majority of 216. >> i'm confused.
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so, is the 940 a net number? it would be 140 billion higher? >> that's close -- >> 940 is the cost of the bill -- >> so i subtract 140, so i get 800? >> reporter: but on net, the bill would shave $140 billion off the deficit -- >> put that in english -- >> it's a $940 billion bill. >> that's the cost of the bill. >> that's the cost of the bill, but there will be tax increases to pay for it. >> reporter: exactly. tax increases and the savings in medicare and other elements of the health care system -- >> i thought the 940 would be a net number -- >> reporter: a reduction of $140 billion off the deficit. >> and john, what are they assuming to get that? is that all coming from insurance premium limits? i mean, where are the cost savings coming from? do you believe that they're real? are they kind of -- >> they're cutting medicare -- >> a hope and a prayer -- well, not as much as they wanted to. >> reporter: they're hoping for reductions in medicare to save a bunch of money, and you have tax increases. those are the principal means. there are other cats and dogs
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tax increases. you have a tax increase on medical devices and device manufacturers. you have the cadillac tax, which doesn't kick in until 2018. you've got a tax on -- an increase in the medicare payroll tax, and you've got the extension of that tax from dividend in investment income as well. >> all right, thank you very much, john. appreciate it. >> reporter: you got it. >> there's one other point i want to make. when we talk about reducing the deficit -- >> right. >> -- in washington speak, that means we're reducing the projected deficit. saving $132 billion means it will be $132 billion less than projected. the deficit will still go up. >> right. and when you look at that gross number, obviously, and you compare that, so it's less money than we would otherwise be spending, but you're still spending, which is why -- >> it's confusing. >> it's confusing. >> countdown to the opening bell, coming right up.
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all right, minutes before the bell, here are your headlines. cpi flat. inflation just not a problem right now. jobless claims down slightly, but we're still not creating jobs. fedex says the recovery is gaining steam, third quarter profit doubled from a year ago. all right? so, that's where we stand, as the opening bells will sound right now. here at the big boards, spectrum brands, celebrating its listing and a new ticker symbol, spb. we'll talk to the ceo in a few minutes. at the nasdaq, citi telecom htk, ticker ctll.
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>> our market reporters are standing by. we are up just barely, but we looked for a slightly lower open. and as mark said, shorting a dull market can be a dumb thing to do. bob pisani? >> you know, the important thing here is, we've been going off almost every day for several weeks. so, on a technical basis, we are overbought, dramatically overbought. does that mean the market's imminently going to go down? no, because if you look at things like new highs, we have the highest number of new highs on the s&p 500 in 12 years. now, if the market is going to start dropping, it's -- the new highs are going to start falling off dramatically. you'll get narrow leadership. you're not getting narrow leadership. it's a very broad-based rally right now. so, at least for the moment, there's no imminent signs that the market is going to deteriorate, despite the overbought conditions. look at some of the good news here. fedex had excellent numbers overall. now, they came out and did say they're reinstating some employee compensation programs that might dampen earnings growth in the fourth quarter, the current quarter and fiscal
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2011. while this may hurt the stock price a little, this is good news. they're making money, bringing back the compensation programs, people will be making more money. again, that's very good news. nike essentially said the same thing. they had fantastic numbers. their stock is on the up side. topline growth of 7%. but expenses rising 16% due to investments of stores and higher salaries. again, they're paying people more. finally, a note from caterpil r caterpillar. world retail sales of machines down 20%. sounds negative, but it's less steep of a decline than we've seen in prior months. we'll talk more about that later. tradertalk.cnbc.com. mike, how are we looking at the nasdaq? >> bob, at the open we are down just a tiny fraction at the nasdaq, but as we enter the home stretch for the end of the first quarter, it is worth making note of the fact that the nasdaq is up around 5.25% so far this year. we do see shares of teva, the world's biggest generic drug company, trading around 4% higher today. the company beat out pfizer in about a $5 billion deal for a privately held generic drug company in germany. the company says it's going to
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start adding to earnings within three quarters after the deal closes, which it expects to happen by the end of this year. b biogen idec down because they released side effects with its new drug and that could hurt sales. those numbers included one more death, unfortunately. we could see the chip index move higher because goldman sachs upgraded shares of broadcom to a buy, raising the target from $32 to $40. that's it here at the nasdaq. in addition, we've got herman miller missing on earnings, though, but the company did say that it is starting to see a pickup in new orders for its office furniture. perhaps that is a bit of an economic indicator. farmersmarket.cnbc.com. let's go to bertha at nymex. bertha. >> thanks, mike. oil is off of the lows overnight. we had a low of $81.89 in electronic trading as far as
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light sweet crude here on the nymex. a number of traders saying they're locking in profits here after we saw the dollar get stronger overnight on continuing concerns about the greek debt situation, and that uncertainty. one of the things traders have been looking at in terms of technicals is the fact that when we moved higher this week, we did not take out that $83 high that we saw last week, so, they want to see whether we can take that out again. not expecting that to happen today. natural gas inventories due out in an hour. we're expecting to see the last withdrawal of the season and a very low withdrawal at that with temperatures so high. the expectation from analysts at reuters, down 28 billion cubic feet. gold, meantime, is holding in, even as the dollar is just a little bit stronger. it's been up a dollar, down a dollar or so, but flat, not really selling off or making much movement here, as we continue to watch that situation in europe. erin or mark? >> thank you, bertha. let's bring in larry levin to get ready for trading. tradingadvantage.com.
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larry, we've got the open, we're up nine. mark made the comment conventional wisdom is don't short a dull market. it may be dull, but it's going one way or the other and it's been going up. any indications it will stop? >> no, no indications it will stop, erin. the only situation i would see any pullbacks, maybe we would get greece, talking about that. i'm sure we'll do that today or tomorrow. if that drops the market, it will be a buying opportunity. i've seen that happen a number of times with greece and situations just like that. this market has only one way it wants to go, and if you short it, you're going to be sorry. so, you know, buying pullbacks in the dow and the s&p, in any of the stock indexes or in regular equities, that's the only way to play this market, unfortunately. i don't like it because to be honest with you, going up very slow like this, there's no volatility, no action. i'm an active trader. people on the trading floor are looking for good volatility. we really haven't seen much of that at all. >> larry, thank you very much. mark, slow but steady bore some of the traders. >> a quick check on the markets for you. right now the dow continues to be boring, but it's up, up 15 points.
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new high, 10,748. nasdaq up one and change. s&p up just 0.25. your "cnbc edge" now with christian flights and jason trenner, chief investment strategist and managing partner with streejist research partners. christian, i'll start with you. what's going on with this market? >> well, it's been huge momentum up on the up side, and i think we've all been -- >> no volatility. >> -- shorting -- exactly. and i think it's sort of trading on pretty thin air and thin views, and i think it's a classic case of buying on the dips, and the long term looks pretty good. as you know, april can be a cruel month for the stock market. so, you know, i think staying put a little bit on the sidelines right now, buying when you can, buying on the dips is a good move and april could bring some surprises. we've got the fed withdrawing most of its liquidity, credit
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support programs by then, and then we've got earnings season and that could begin to turn little bit. but i'd still say we're, you know, we're buyers on any dips and we're buyers particularly of any stocks which you see strong value in. >> jason, are you buying the dips? >> i would be, mark, and it's mainly because i think that the economic momentum right now is quite positive. i think it's very likely you're going to see much better job numbers over the next couple of months. you've obviously got the census, you've got an economic recovery in place, and i just think it's -- i also think, let's say a risk-reward out of washington at this point is probably pretty good, to the extent to which a lot of bad news is priced in, and if you're going to get surprised, it might be to the up side. so, there's a lot of things out there that make me a buyer on dips. as we've talked about in the past, i do think eventually the bill for all of the government fiscal monetary stimulus will eventually come due. i just don't think it's until next year, so i'm a buyer.
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>> christian, what about the fedex situation? things start to get better, so companies do what we've said they should do, which is spend all of the massive money they've accumulated, giving benefits to employees or raises or buying new planes or whatever it is. it's going to hurt profits and that could hurt stock prices. >> yeah, well, eventually, right now the difference between cash flow and capex is about as high as it's ever been. priced since the late '40s. so, the good news is that allows companies to obviously snap back in terms of capex spending. i think that's another thing that will drive economic growth. but i also think you're going to get some top line here which will help out, because you know, you just posted roughly 6% and 3% gp growth. you're probably going to get that. so i actually think you've got a little time on that before it starts to bite and i don't think companies are going to give it up on cost any time soon. >> quickly. >> no one should be surprised by the number. consumers are not going back into shopping and internet shopping in any big volumes and
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i think people got ahead of the fedex remarks. but where i think there is big value is in staples, companies with big overseas earnings, visibility, auto books. and this is where you can pick up the mega caps which have trailed this market for 10 or 12 times earnings and those are good earnings. >> christian thwaites and jason trendert, thank you for sharing your thoughts. stocks are on the move, a busy day on wall street. we'll show you who's up and who's down next. plus, the real state of ceo bonus pay. there's the headline, and then there's when you look at individual names. we'll find out what corporate boards really did this year. and money on the vine. jean wells live in los angeles. jane? >> reporter: guys, this is a bottle of screaming eagle, and this is about as close as i'm ever going to get to one. when filled, it's worth $2,500, and it's empty right now. some napa growers are feeling empty right now. threats to america's wine capital when we come back.
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all right, gamers, game, set, match, if you will. check out gamestop, number one on the s&p 500 this morning. the stock has clawed its way almost back to even on the year, down just about 1%. look at that big move, 10%! we're probably even now year-to-date. the company coming out with better-than-expected fourth-quarter results and guidance for the full year that looks to at least meet or beat the estimate. ava's budget is higher here today, raised from overweight to equal weight at barclays. they think it's headed to $15. they think the daily comps will turn higher this year. burger is clearly the king this morning, raised to buy from hold
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at deutsche bank, good for 2% on the early trade today. they think the sales trends have bottomed. they like the macroeconomics situation and they think breakfast is back. breakfast king, maybe. total, the french oil giant, $130 billion market gap, down 1% today. that's a lot of lost market value when you're that big. energizer is 3% higher here today, upgraded to overweight from neutral at jpmorgan. they think the stock is worth $70 a share and they also raised their fiscal '10 and '11 estimates above consensus. and corning upgraded to overweight from market weight at thomas weisel, higher today by about 5%. i had to squeeze that in for you, erin. back to you. >> thank you very much! new details this morning on the state of ceo bonus compensation. but mark, they're still making a lot of money. >> yep, they are. >> multiples and multiples, hundreds of times regular people. mary thompson's back at hq, though, to give us the headlines. where has improvement happened?
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>> thank you, erin. wall street bonuses rebounded this year, but an early read suggests this wasn't the case in c suites across the country. in a new report released this morning, the research form equilar says the median total bonus payout for decreeos fell 12.6% in 2009 to just over $812,000. performance-based bonuses or those linked to metrics like a firm's stock performance or cash flow fell 10.3%, and discretionary cash bonuses fell 20.5%. board adviser and author bruce elig says they're listening to shareholders angry about executive pay. >> the board has paid attention to the shareholders and hearing their voice. and with regard to the redesign of the plans in trying to better design and develop metrics consistent with what the company is trying to do and what the shareholders hope to see, which is an increase in share value. >> for this report, equilar looked at the proxies filed by 323 companies whose fiscal years
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run from the end of june through the end of december. all the firms have revenue of over $1 billion. and as you might expect, ceo bonuses dropped more in some industries than for others. tech ceos falling 53%. for capital goods ceos, they dropped 41%. only service ceos saw bonus increase by a healthy 21%. missing from that list, you might notice the median payout for financial services ceos, and that's because the median bonus was zero in 2008. but with no place to go but up, the median bonus for these ceos came in at $576,294 in 2009. reflecting the tougher stance on pay, fewer ceos actually received bonuses last year. only 54.5%, down from 57% in 2008. but keep in mind, this is an early read. of those 232 proxies that were reviewed by equilar, the ones with fiscal years that ended before december 31st, they actually paid much smaller bonuses, while those whose fiscal years ended on december 31st, the bonuses were higher than the year before, suggesting when all the other proxies are
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reviewed, ceo bonuses may actually have increased last year. erin, back to you. >> thank you, mary. all right, fresh from the opening bell, first on cnbc, spectrum brands, celebrating its listing and new ticker symbol spb. the consumer products company successfully emerged from bankruptcy reorganization. chairman and ceo ckent hussey joins us now. good morning, good to have you with us. >> good morning, thank you. >> some of the brands you make are rayovac, repel, lawn & garden, tetra, nature's marine land in pet supplies. so, the bankruptcy reorganization over and now you're in great shape? >> absolutely. in the last three years, the company has slimmed itself down. we've taken out about 42% of the
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population of the company. and quite surprisingly, i think, and to the credit of everybody in our company, we have actually increased our profitability each year over the last three years. we actually increased our profitability in 2009 while we were in bankruptcy. so, that's a testament to the phenomenal work of all the employees of the company. >> debt was reduced by $800 million out of how much? >> the total debt in the company was approximately $1.8 billion, and that was one of the reasons that we ended up in chapter 11. as you point out that our chapter 11 was just a financial restructuring. we're very proud of the fact that we were able to pay all of our vendors, all of our customers, all of our employees 100%, 100 cents on the dollar. so, the financial restructuring really resulted in a significant reduction in the leverage for the company, increased liquidity and the ability now to begin reinvesting in the great portfolio of brands. >> it sounds like you are similar in some ways to darden.
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>> we are very similar. they're larger than we are right now. they've done a number of acquisitions. actually, spectrum brands is a name you may not know. the company was formally called rayovac corporation. >> rayovac, we know that name. >> we were founded in 1904 in madison, wisconsin, so we're a 104-year-old company. in the last ten years we've grown dramatically through acquisitions. we now do business in 120 countries around the world that this portfolio brands. we have three major business units -- batteries, consumer batteries and personal care items under the remington brand name or home & garden. >> how does it work? you've darden and you and a couple other guys running around and they buy orphan brands -- >> fortune brands. also an amalgamation. >> and a lot of you buy orphan brands and try to turn them back into something. >> correct. >> things that used to be great and have seen better days and you fix them. how many brands are there out there? is what you guys do as a whole bigger than some of the brands we know out of a proctor &
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gamble? >> the bigger guys have typical brands -- p&g talks about billion-dollar brands. we're about a $2.25 billion company, so our brands tend to be smaller than that. and in many cases, these are great brands that the big guys really aren't interested in because they don't have enough scale. but we have an infrastructure, we have great customer relationships around the world, and by bringing brands back into our portfolio, investing in them, taking them through our infrastructure, we're able to rebuild them fairly quickly. >> and you're on track to buy russell hobbs. >> russell hobbs, correct. >> which is another company where you have to explain what it is they do. they make the george foreman grills. they own all of black & decker? >> no, they have a license to the black & decker name for kitchen appliances. >> that's what i thought, okay. and toastmaster and littermaid. >> that's correct. >> so, that's another grab bag, although i see how littermaid would fit with pets. >> well, the interesting dynamic here is they're about an $800
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million company in small kitchen electrical appliances. we have about a $500 million business that's in men's and women's personal care and grooming, women's hair care. we sell that under the remington brand name. the two business models really overlap very, very nicely. we sell to the same customer base. >> all right, sir. thank you very much for your time. and of course, best of luck. >> thank you. >> now that the reorganization is done and you're back on the new york stock exchange. "commodities corner," extending beyond the traditional crops and metals, we're talking vines, wines, money. jane wells, live in la la land. >> reporter: yes, mark. i'm at silver lake wine, it's a very cool boutique wine shop in los angeles. you know, 90% of u.s. wines come from california. it's a $30 billion industry here. most of the good stuff comes from napa. and this harvest we just had was a good one, but now growers are suddenly concerned it may not have a nice finish.
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they're pruning grapevine canes in napa valley, but it's the wine industry feeling the cuts. >> first thing i say is, oh, damn! >> reporter: jim is a grape grower who says this is the most difficult time he has seen in 30 years. the recession has led to a drop in america's appetite for high-end wines. dataquick reports that vinery reports have quadrupled and ten could go into foreclosure, says silicon bank, compared to one in 2008. now for the first time, the european grapevine moth has shown up in the u.s. in napa, and the moth completely destroyed the crop at one 9-acre vineyard of chardonnay grapes. >> the little worm goes inside the berry and consumes the berry, and then a lot of fungus comes into the branch and it rots. >> reporter: grape growers gathered in napa last week to figure out how to control the moth through mating disruption and pesticides. >> part of the problem is, we're
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not certain exactly where it is and where it isn't at this point. so, the first job here this spring is for us to get traps out. >> reporter: but growers don't feel completely crushed. this year there will be less competition from popular, less expensive chilean wines, as that country's industry may have lost at least one-fifth of its production in the massive earthquake. jim verhay calls napa's current downturn deeper than most, but still a bump in the road. >> for some people, it's a bigger bump, buts it's just a bump in the road for the valley. we'll be back producing the same quality wines that we've had in the past. >> reporter: now, while overall, u.s. wine exports fell 15% last year, in the fourth quarter they actually rose 16% from a year ago, and napa growers are used to dealing with pests, and they think through jij lens, mark and erin, they can get a handle on this european grapevine moth in one generation. we'll have to see. back to you. >> one generation of people or moths? >> reporter: moths, moth. let's hope not one generation of
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people, because i would like my napa wine sooner rather than later. >> that's a long time. thank you, jane wells. >> generation of moths. later this morning, the lagards. they've been weak, but now, mark, they're getting strong, like popeye. >> like popeye? >> popeye. he got strong. >> oh, okay. >> he ate his spinach. plus, a new way to get -- you're kind of dating yourself there. a new way to get your baggage to the airport without carrying it. i'll bet you you're interested in that one. >> i don't check bags. >> no? >> nope. >> carry-on or nothing? >> i'm not going to say what i think about people who check bags. you've got to be able to go car carry-on if you've got to move fast. >> okay. >> otherwise, the airlines lose your bags. >> we'll be right back. >> we'll be back! 
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welcome back to "squawk on the street." i'm diana olick with breaking economic news. the conference board's index of leading economic indicators rose 0.1% in february. that marks the 11th consecutive monthly increase in the index, designed to forecast economic
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activity six to nine months ahead. the largest positive contributors, interest rate spreads and money supply. the biggest drags, stock prices and manufacturing activity. now let's go to tyler mathisen for some more breaking economic news. tyler? >> that news is the philly fed number, and it is much better than expected. the number came in at 18.9%. the forecast was for 18 on the button, 18.0, and that compares with a number in the prior month of 17.6. so, 18.9 is the headline number. this, of course, measures manufacturing in the middle atlantic states. the employment component of that was also higher in the most recent month. that's a sign that maybe the job market in the mid-atlantic is improving. and let's not forget that even as these numbers were improving, the middle atlantic was struck by some of the strongest snow and wind storms in the past few decades. erin, back to you. >> thank you very much, tyler. and a significant point he made there at the end, bob pisani, when he said, look, to notch up this improvement, especially on that key employment component,
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given the storms, not so bad. >> and we've seen a number of interesting components do a lot better in the last few days here. i want to note, mention things like the casual dining scene, where we've seen significant price improvements in the last two weeks as these stocks have moved up. there has been upgrades. take a look at denny's or dineequity. they're the applebee's company and ihop. these stocks have moved up dramatically in the last couple weeks. we have seen upgrades, dineequity, able to refinance their debt, or they think they'll be able to at a more reasonable rate. we've seen companies coming to market with offerings recently. you see burger king also move up dramatically in the last two days, upgraded to buy at deutsche bank today. because the sales and margins significantly have been well below historic averages and they're starting to look a little bit better. so, these stocks have been moving up on improved expectation of sales and margins moving up. i mentioned, erin, this morning, higher salaries coming out down the road for a number of different companies, including
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fedex and nike. they're talking about going out and actually improving the salary structures of these two companies as their earnings are improving. this is very good news. more money in people's pockets means higher compensation. that's certainly going to help the u.s. economy. tradertalk.cnbc.com. mike, how are we looking over at the nasdaq? >> bob, the economic data that came out just a few minutes ago at the top of the hour really isn't doing anything to move this market. we're still up 0.1%, but you want to talk about march madness? forget about the ncaas. the nasdaq is up 6.75% so far this month. a couple big stocks, though, hitting new highs here in early trading, first of all, broadcom up 2% because goldman sachs upgraded that stock, increased the target from $32 to $40. and as you can see, there's still a lot of runway there. not really moving the chip space in general, though. right now the philly semiconductor index up just 0.2%. secondly, we've got teva pharmaceutical up 4.2%.
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conventional wisdom, also a new high, by the way, would say when a company plunks down $5 billion to buy something, the stocks would go down, but they're saying that this acquisition of a privately held german yark company is going to be "significantly accretive," meaning in english, it's going to add to earnings a lot more than we thought it would. farmersmarket.cnbc.com. bertha? >> profit-taking in energy started overnight when we saw the dollar index move up as the euro moved lower on concerns about whether there is or isn't going to be a greek debt deal. meantime, though, we've come off of those lows here during the session. one of the things that traders are looking at is kind of the technical movement and the fundamentals behind what's going on in oil. opec, although it kept its production steady yesterday, its compliance is down to about 53%, so that's an extra 2 million barrels of oil a day out there on the market. meantime, we're going to get the nat gas inventory numbers. estimates are from anywhere for
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withdrawal of 11 to 44 billion cubic feet. we'll have numbers at the bottom of the hour. >> thanks, bertha. inflation, jobless claims, then we just got the philly fed and leading indicators from tyler and diana. all that adding to, well, a mixed economic picture. then we had earnings from fedex and nike, which frankly, were pretty darn good when you look at the consumer. so, let's find out if we really are on the road to recovery. david fleischer is president of first trust financial resources. let's start with you, david fleischer. as bob pisani said, lots of different datapoints, at this point all going in the same direction. it was a while when they were sort of mixed. now the lion's share of the data seems to be positive. what does that mean? swrrks we swrrks. >> well, good morning, erin. it's encouraging, certainly, and there seems to be more of a positive bias over the last 35 days coming off the correction we had earlier in the year, but there are still headwinds, and when you talk about where the market's headed, you don't know
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how much of that's already baked in, and probably some of it is. what we really freed to take a look at, and i know you've heard this before, but it's a drum worth beating, that is the employment numbers. when there is real traction in employment, i think you'll see other things fall into place in a much more positive way. >> but what it comes down to what hank paulson always said, housing, housing, housing, and that is where we really haven't seen significant improvement. maybe things are getting less worse, but they're still getting worse. >> well, it's not only housing, housing, housing, it's jobs, jobs, jobs. i agree with that. we could see some improvement in housing the next couple months leading up to the home buyers tax credit expiration. the weather's better. we were watching mortgage applications move up just a little bit. i think that could be a sign that at least for the next couple of months we are going to see some improvement in housing sales, and when people buy a home new to them, you know, they spend some money moving in there, fixing it up, and claims today were down a little. i'd like to see them get below
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450,000, but i believe we're going to get some private sector job growth, not just government census-takers. that's not what the economy needs. they need private industry jobs, and i think we're on the cusp of getting them, hopefully this month and not a one-month wonder like in november when they went up and there was no follow-through. >> aren't the days of strong job growth over, though, because of technology? >> strong -- i think it's true, mark. i mean, i call this a half-speed economic recovery. it took us two years, we lost 8.5 million jobs. it could take us four or five to get it back. so, strong is relative. i think we'll be strong enough over the next year. i've got about 1.5 million jobs that will begin to knock the unemployment rate down, but strong, not 300,000, 400,000 jobs month after month, at least not in this type of recovery. >> david, what about you on the job picture? >> i think, i generally do. i think it's a matter of managing expectations, not just with economically, but also as
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it relates to the markets and individuals' financial plans and decisions, and the idea that people talk about all the different -- is it a "u" recovery, "v" recovery, "w" recovery? i've heard the other day the square root sign recovery. and i think it might be more inclined to believe that it's going to be that kind of slow but steady growth, which in the long run will be fine, but we have to brace ourselves for the next few years of it, again, being a slow road. >> stu and david, thank you very much for your views. appreciate it. >> thank you. >> thank you. just ahead, another sign big money is shifting into high gear and spending again. and then, trading the 22% drop in natural gas prices this year. we'll have the inventory numbers coming out. bertha will have them for you in just about 22 minutes. and later, lagging large caps, mark, are starting to catch up after months of everybody saying buy those big multicountry industrials. they're going up. and as we go to a brief commercial break, here are some of the biggest movers.
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number one, gamestop. that's the retailer of video games. and the israeli generic drug company teva is number two. tdd# 1-800-345-2550 that's why, at schwab, tdd# 1-800-345-2550 every online equity trade is now $8.95 tdd# 1-800-345-2550 no matter your account balance, how often you trade tdd# 1-800-345-2550 or how many shares... tdd# 1-800-345-2550 you pay what they pay what everyone pays: $8.95. tdd# 1-800-345-2550 and you still get all the help tdd# 1-800-345-2550 t you expect from schwab tdd# 1-800-345-2550 millions of investors. one price. tdd# 1-800-345-2550 at charles schwab... tdd# 1-800-345-2550 investors rule. tdd# 1-800-345-2550 are you ready to rule?
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40 minutes into the trading day, the dow is higher. it's maybe the eighth straight session. up about 800 points over the past five weeks. mark, that says it all. it's felt slow and agonizing, but 800 points. >> in how long, five weeks?
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>> five weeks. so, i mean, i guess, you know, frankly, you could say that's actually relatively quick. recently, it has not felt that way, but it just goes to show you, may have felt slow, but if you weren't in it, you lost 1,000 points. dupont is the biggest gainer for the day for the dow. up 2%. gamestop the biggest mover on the day, up 9%, better-than-expected profits. the company says it sees a recovery in 2010. their indicator of consumer spending because they sell video games. and on the rest of the consumer front, other good news, nike orders were up 9%, profits almost doubled. sears, str holdings also were higher, and they're at one-year highs, as a matter of fact, mark. a supercar may be coming to a street near you, and it could be a sign luxury spending is back. phil "four on the floor" lebeau, behind the wheel with a special guest. >> reporter: thank you, mark. we are joined by anthony sharif,
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managing director of mclaren automotive out of england, and they're announcing today a major expansion around the world, particularly here in the united states. anthony, thanks for joining us. you're also introducing a new vehicle that you're standing in front of, the np-412mv. tell me more about this supercar, if you will. >> good morning, yeah, thanks. this is our new sports car. it's the first time mclaren has entered this segment of cars that are around $200,000, $250,000, but what it does that's really new is it brings technology that we've been using for the past 30 years in our success as a formula one race team and it brings it to the road. so, for example, it's the only car anywhere close to its segment that will use a carbon fuel safety cell, a mono cell, into production. the result is an incredibly light car, an incredibly safe car, but with absolutely the highest performance, over 200 map, a quarter mile from a standing start in 11 seconds, which is what drag racers used to have just a few years ago, but at the same time, it will
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have the best co2 efficiency of any car in its segment, due to its extra light weight. >> antony, it also has a large price tag, $225,000 to $275,000. that's what the price tag is expected to be when these start going into showrooms or are delivered to people. what kind of demand do you expect in that price range there? >> well, i think from our standpoint, our goal is not to produce the most cars in the sports car market. our intention is to be pretty exclusive, initially in the u.s. market we want to deliver in the first year just about 300 cars. but we think for that level of demand for a car that really does offer significant performance improvements with respect to its competitors and as a car that you can also drive every day because of its drivability, there is going to be plenty of demand for that type of car. we've already had well over 500 very strong intentions to purchase from the u.s. market. so, we're very confident that the environment we find ourselves in today is pretty
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robust for this type of car. >> antony sheriff, managing director of mclaren automotive, joining us today live from england. a very impressive car standing right behind antony there. mark, the mp-412c, price tag $225,000 to $275,000. that's the price range that it's going to be going in. and they believe that there's plenty of demand out there in that market. >> not from me there isn't, but i'm sure there are others. >> there are people out there. >> spend that kind of money, yep. thank you, phil lebeau! i want to bring your attention to some stocks on the move, and that, of course, means we go back to the magnificent nesto. >> all right, i've got something not so interesting here, and that's going to be micron, the worst performer in the semiconductor index here. semis have been leading in this 28-day rally that we've seen. micron is initiated underperform at mcquarry. they think the price target is
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$7.40. that's 28% from yesterday's previous day close. but it's up almost 20% in the two-month rally. vimpel comm, the second largest cell phone company in russia, is falling sharply here today, down over 5%, and this after it missed on its fourth quarter results. its sales were down 10%. $17 billion market cap, folks, same as motorola. dens overlook them. they've got 16 million subscr e subscribe subscribers. moody's gapping higher on heavy volume. there's a 13% short interest. the stock is at a ten-month high, trying to bust through 30. keep an eye on moody's. they've already done 60%, 65% of their average trades. dupont, as you mentioned, is number one, but i'm going to give it an "f" for fail because it gapped higher on the interday, got to $37.85, then pulled back. let's get to david faber. "the faber report." >> thank you, matt nesto. appreciate that. you know, we didn't talk about this earlier, but a fairly large
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transaction in the health care business, of course, this morning, namely, teva pharmaceuticals doing it yet again. teva, by the way, an enormous company. take a look. $53 billion-plus market value, has been buying up generics around the world for many years now. israeli-based teva, again, striking yet again this morning with a large deal in germany, worth about almost $5 billion, $ 3.6 billion euros. rat ratiopharm, would have combined revenues of $16.2 billion. this company will put teva in a position to be the leading generic pharmaceutical company in europe, taking the sales there from what are around $3.3 billion a year to $5.2 billion a year. and take a look at the performance of teva. remember, i mean, the bar pharmaceuticals deal. there's so many that have come along, but that's certainly one that many of our viewers may recall. teva has grown enormously, as i
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said. don't know there were any other generics out there that have more than a $50 billion market value. and this company, of course, one would expect, will continue to acquire. off the call this morning, a few things to share with you. they do say that this acquisition has not been included yet in their 2010 forecast. they don't see a lot of divestitures that will be needed as a result of the deal. they were in competition, teva, with a couple of other potential buyers, including what i'm told was pfizer, but ultimately, they came in with what was the largest single offer. hence, they are the new owner. global health care m&a, by the way, has been one area that we may still see a number of deals to come. we talked, of course, about osi pharmaceuticals, and then there are others out there. carl icahn fighting over biogen and genzyme. doubtful you see deals arrive out there given the size of those two. nonetheless, it is the leading area in terms of sectors in m&a
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for 2010 with $74.7 billion in deals. however, still well below 2009. of course, if you do remember, 2009 featured two of those huge deals, merck and sharing and pfizer. there's a look at the global health care deals in case you want to share that, you know, with your friends at a cocktail party. bring them up to date on the latest numbers from the health care m&a. mark, back to you. >> thank you very much, david faber. just ahead, we have big news on health care. we will bring in john harwood. it appears we have just taken a step toward a vote. >> a big step, apparently. and the dow up about 4% so far this month. that would be the month of march. can it hit 11,000 by march 31st? i sort of feel, i don't know. i feel a bad omen by asking such a question here, but yes or no? it's a simple one today. squawkonthestreet.cnbc.com. and we'll look at the dollar as we go to our brief break. it is higher by 0.4%. thing as taking a chance?
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one of the brightest minds in the business in the hospital this morning, jerry york, a titan in the auto industry who turned into a key player in the world of activist investing, collapsed yesterday. bureau chief jim goldman is live in san jose. jim? >> reporter: erin, good morning. this is truly a tragic story. jerry york was hand-picked by steve jobs to join apple's board way back in 1997, just as jobs was returning to take charge of the then struggling company. york brought in because of his successful history as a turn-around artist. sources tell cnbc that york suffered a significant cerebral hemorrhage at his home in rochester, michigan, on tuesday night. we're told his condition is grave and that his family is with him. york made a name for himself first at chrysler during the lee
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iacocca years and then as ibm's chief financial officer. he was a member of kirk kerkorian's extra cinda group at general motors. kerkorian released a statement last night calling jerry a dear friend and business association. jackson said he's been one of the most influential voices in the auto industry in the last 30 years. now apple may have some decisions to make. google ceo eric schmidt resigned from the board last year and wasn't replaced. if york doesn't return, apple's board will be down to six members. bylaws stipulate they have to be between five and nine members. who they might add would be anyone's guess, but speculation is that chief operating officer tim cook might be asked. york is 71. no statement about any of this yet from apple. erin, back to you. >> all right. thank you very much, jim goldman, for that update. big news on health care, more broadly this morning, as we're inching towards a vote.
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john harwood is live in washington. he was on the phone earlier with some of the headlines you broke, john, but where are we when it comes to a vote, maybe closer than we were? >> reporter: yes. we look like we're going to have a vote on sunday, erin. the democrats feel they've got a big step forward today with this number from the cbo, which is not a surprise. it's in the range that we had expected, but having it on a piece of paper, saying in tha this bill, which will cost $940 billion over ten years, but cut $130 billion off the federal budget deficit, according to cbo, is a means of persuading those blue dog members of congress that they ought to vote for this bill. jim clyburn, the whip in the house of representatives, came out a few minutes ago and talked about the encouragement he got from these numbers. take a listen. >> we were not going to ask members to give hard, fast commitments until such time as we got the numbers we got this morning. and the bill is posted. and we will do that some time
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early afternoon and start the 72 hours to run it. so, i think that we are much closer today, and by evening, i think we'll be in the very comfortable position, and by tomorrow and people have had time to read what we post, i think we will be very close to the 216 votes that we need. >> reporter: so, erin, democratic leaders tell me they've got 200 votes firm for this bill. they need to get the other 16. they're working on that right now. one of the things that they think will help them convince fiscal conservatives is that two-thirds of the savings -- or two-thirds of the cost of this bill is paid for by health savings, principally, savings in medicare, cuts in medicare, as opposed to tax increases. about one-third coming from tax increases. those tax increases are the cadillac tax, delayed until 2018, the rise in the medicare payroll tax for people over $250,000, and extending that tax to dividend and capital gains, and of course, the tax, erin on
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medical device manufacturers. >> all right, thanks very much to you, john harwood. and thanks for relaying that. there's been a lot of questions. everyone sort of has their own belief of where the money's going to come from, but there is actually a bill and it's laid out in there. so, there are facts. breaking energy news on the other side of the break. we promised natural gas inventories and we're going to talk about the plunge in natural gas prices, what will happen on the back of that, bertha will know.
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host: could switching to o 15% or more on car insurance? host: is ed "too tall" jones too tall? host: could switching to geico 15% or more on car insurance? host: does a ten-pound bag of flour make a really big biscuit?
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welcome back to "squawk on the street." i'm bertha coombs at the nymex, where we are awaiting the numbers for the natural gas inventories. the estimates range for a withdrawal of 11 to down 44, and it came in at the top of that feet., down 11 billion cubic
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we are seeing right now natural gas move down. we'd already hit a four-month low overnight and we are below that right now. we've got natural gas trading at about $4.16 in some volatile trading here. we've gone as low as $4.15. so looks like the progression continues to be down. erin, anderson electric says if you look at the demand for natural gas, not for heating last week, it was up 1.4% from a year ago, although it was off nearly 7.5% from the prior week. over to you. >> thank you, bertha. and now you've got your natural gas, we'll be talking about that trade in just a moment. but the rest of your headlines here at 10:30 eastern, 7:30 pacific. dupont leading the dow. we mentioned that. it's up about 2.5%. the dow overall is up just about 17 points. it's still an 18-month high. consumer prices came in flat, reiterating what we saw in the producer's side of the ledger yesterday, costs aren't going up. well, at least prices aren't. and u.s. house majority leader steny hoyer says sweeping health care legislation is on track by
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passage by the house. we could see a vote as soon as sunday, according to our john harwood, mark. let's take a look at the markets and their internals. the dow right now is up 19.5, but the s&p is down half of a point. nasdaq also down slightly. winners and losers pretty much even on the big board. and on the nasdaq, slightly negative, 200 more down than up. >> natural gas prices down 20% so far this year. you just heard the inventory numbers from bertha. so, the prices are down, but interestingly, some of the natural gas utility stocks are up. so, what's the reason for the disconnect and what is the trade right now for, well, for stocks and for natural gas? well, scott hope and jim elkins are joining us, a new face to cnbc. we appreciate both of you being with us. jim, since you're the new face, let's go ahead and start with you.
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what accounts for the disconnect in the natural gas prices are down and some of the utilities not so much? >> well, with these prices being up -- or the prices being down, there's a couple of ways that the natural gas utilities can benefit, and the first thing to look at is on the core utilities side in general. low gas prices tend to help the conversion market yield. you'll see more new customers, but where it could help them is on the storage and trading side. and with that part of the business, the gas utilities really don't care if the price of gas goes up or down. they just want volatility. the greater volatility with the commodity, the more chances they have to trade around that gas and lever up their earnings. >> okay. phil, what's your point of view on natural gas itself, especially given the difference you're seeing between that and crude oil? >> well, natural gas has always been assumed, unfortunately, to be a high correlation to crude oil, but they are actually different fuels. natural gas has a great deal of supply, both locally and globally.
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so, we may see a squeeze in the price of crude oil and natural gas can come plummeting down. that's exactly what we're seeing right now. the natural gas play between the commodity itself and the stocks that represent natural gas are all anticipatory. natural gas is emerging from the green movement as the fuel of choice. we have t. boone pickins pushing natural gas, many other groups saying natural gas is a better fuel, more efficient fuel, and we're already seeing signs that infrastructure may be changed over for the transportation industry to take into consideration some amount of natural gas. this makes stock plays anticipatory, so you can push up stocks that might benefit from this kind of a movement higher, even though the price of natural gas is going down. and as jim said, when the price of natural gas goes down and fixed contracts have a higher price, the spreads are more profitab profitable. therefore, the bottom lines of these utilities and gas distributing companies, pipelines, et cetera, go higher. >> well, phil, what changed over
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the last few years? a few years ago, everyone was talking about all the pressure on natural gas because electric generation plants are being built and were going to run on natural gas, new homes were being built everywhere, most of them heated with natural gas. and so, a few years ago, people were talking about natural gas going through the roof. now all of a sudden, we've got too much? >> well, if you actually look at the historical prices of natural gas, we're about 100% over the ten-year averages starting back in 1993. natural gas was selling somewhere around 1.50 to 2.50 and now we're at 4.15, so the price of natural gas is considerably higher. the question is how much natural gas is being discovered globally, and in particular, in the united states and canada, that's going to come to market relatively quickly? and new techniques for freeing natural gas from shale and from other resources has actually given the supply side much more of a boost to keep in balance.
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and this is something that the green movement has paid very close attention to. >> yeah. jim -- >> yes? >> would you rather have a company that finds gas, transmits gas, sells gas to the public? where in that food chain do you want to be? >> well, i would kind of like to own a company that does all the above, and the best example of that would be industries that have the utility, in the storage and trading business where they can trade on the market volatility with the commodity, they have onsite facilities and also an investment in the marcellus shale where they can benefit on the a & p side. >> so one size fits all stock. thank you, phil, thank you, jim. >> thank you. >> appreciate it. >> always a pleasure. all right, coming up, the world's most dependable cars. you might be surprised to see who made that list this time around. >> pugeeugeot? >> i'm not going to tell you. >> plus, ge, walmart and intel,
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these stocks were stinking up the market, but they are now showing signs of life, mark, as you are aware, in the case of one of them. should you be a buyer or should buyers beware? and another check as we go to the break on the natural gas inventories. find the report down another 3.6%. no love for natural gas, mark.
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today at 12:00 eastern time, that is about an hour and 20 minutes from now, christina romer, the white house chair of the council of economic advisers, talks to the "power lunch" gang about the economy and all things money. you don't want to miss that. gamestop almost 9% higher right now, getting a real beating in recent months, but earnings came out better than expected.
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and as we said, they sell video games, so it's an indication of consumer spending. matt nesto is back at hq with some of the other names that are catching his eagle eye. >> catch anybody's eye, won't it? tiffany's up a 22-month high, 1.5%. the company says when they report earnings before the open on monday, they could probably top consensus, and they also think that the guidance going forward could be bumped higher and the stock is moving on the news, as you see, about 1.4% on the session. also, if you look at the education, the for-profit education stocks, itt education is the leader here today, but corinthian and apollo all trading higher today after ubs says the for-profit education stocks could do well in the face of state budget cuts. esi is the best performer of the pack. and then lastly, you point out, bring your attention to little old shoe carnival, what a little stock this is today. it's up 5% on the session.
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sales were strong, costs were down, stock's at a three-year high. it's been down only one day this month, mark. it is on a tear, and their forecast is 40% above consensus. big miss. mark, back to you. >> all right, thank you, matt nesto. the jd power survey, the holy grail of automotive reliability. this year, some big surprises. phil lebeau, or in this case, fill "real men do drive minivans" behind the wheel with who's in, who's out. >> don't tell anyone, mark, i got rid of the minivan. >> did you? >> i did. we'll talk about that some other time. the top five list this year from jd power's vehicle dependability study, vehicles that are three years old. 50,000 owners filled out the survey. porsche zooming from 11st to 11st. a tie for third between buick and lexus and then mercury. let's talk about lincoln. this is a nice move by lincoln, surging into second in the dependability study. why?
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three years ago they made a commitment to improve the fit and finish of the vehicles, and it's paying off. the owners reporting fewer problems. what about toyota? it's not in the top five. well, it is number six, falling from fourth to sixth in dependability, but keep in mind, toyota owners report to jd power fewer problems than last year, and what about these pedal problems, the recall issue? well, this survey was done before the recalls went out. and in terms of what people reported, only 1 out of every 1,000 people who responded to jd power raised a complaint about their pedals. slightly above average, but not unusual, according to jd power. and it did not impact the company's dependability score. in other words, even if those people had not reported any problems, it wouldn't have changed where toyota finished. there you take a look at the stock, still trading up between $75 and $80 a share. mohr on the jd power report, check out behindthewheel cot dot cnbc.com. from laggards to leaders. >> leaders to laggards --
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>> mark and i are struggling. is anyone else out there having a hard week because the daylight saving? >> the one-hour shift has completely confused my biorhythms. >> hard to get up, can't get to sleep. you take tylenol or advil p.m. and then can't get up. it's bad. >> we're having trouble here. just ahead, blue chip companies that are starting to power ahead and whether there's still time to cash in. >> but first, hello, trish! >> hello, erin. hello, mark. coming up at the top of the hour on "the call," as the fed fights to keep control of small banks, we're asking, which is a better investment here, big banks or the smaller, regional ones? plus, numerous companies araisig their dividend. we'll look at dividend stocks as an investment play. and we'll be talking with the ceo of the utility company xcel. find out what he wants the government to do in terms of leaving the sector alone. we have much more on "the call."
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first, "squawk on the street" is back after this break. at's on ts of independent investors? let's ask. when you're trading a stock, every penny counts. i hate when the trade is done and you find out you paid more than the quote price. i want it at the price i expect... or better. td ameritrade's unique trading platform uses multiple market centers to help you find the best possible price. i like those odds. i know they can't flat out promise a better price, but they're always looking for it. they know what matters to me. every online stock trade is always $9.99. not a penny more. and no maintenance fees. who else does that? are you ready to declare your independence? td ameritrade. independence is the spirit that drives america's most successful investors. announcer: trade commission free for 30 days, plus get 100 dollars cash, when you open an account.
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two dow components -- sorry,
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i didn't realize we were back on. sounded different to me. two dow components, dupont and mcdonald's, hitting new one-year highs today. we've mentioned dupont, which in addition to being a one-year high is, i believe the biggest gainer for the dow. interesting we talk about 18-month highs and these names at one-year highs, mark. mark, it's only up 13 points today, but it's up what, 800 over the past five weeks? so, it seems paltry, but it adds up. eastman chemical trading at levels not seen since september of 2008. i'm not sure as to the exact date as to whether that was pre the weekend when hell broke loose or post, as in pre-lehman or post. but not long ago, big blue chips like ge and intel were lagging, but not so much now, mark. >> that's right. they were behind the 8 ball and behind the market, but now they're trading at 52-week highs and surging ahead. is there still time to make a profit from these former losers?
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m.j. mats is from fifth third asset management insurances right now. m.j., thanks for being with us. >> thank you, mark. >> it seems to me, you know, and i'm no expert here, but it seems to me, these stocks have been down so long, there's got to be something left, even though they've had a nice move. >> oh, sure. you know, a couple of days trading a week or so, that's not going to offset what you've had, which is about a year's worth of lag to the low quality, to the smaller cap, growthier stocks, have really out-performed as the markets just vaulted off of those year-ago lows. so, the run is not over. there are still ample opportunities among the bigger cap, among the higher quality, and in particular, those that are self-funding here, as credit conditions are still tight. >> you know, interestingly, usually, usually in a market
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rally, in a cats and dogs come along last, they're a sign that things are getting topee when the real junk starts doing well. here, although the stuff that's done well up until now is not junk, it has not been the bigger stuff, it's been the riskier stuff. why is this upside down like that? >> right. i think you've got to throw out some of the old rules of thumb here. as we come out of this economic trough, this cycle looks a little different to us versus the previous cycles and what you would normally have normally have is banks coming out to lend to support expansion across the board and the rising tide would lift all boats. in this case, credit conditions are just still really very tight. so those companies that would normally be benefited by bank lending and the equity and fixed
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income market ability are really disadvantaged. it is a little different this time and you need to look at those who have strong free cash flow and the balance sheets to fund their own growth. >> michael, what about, you're noting some -- okay, sorry, michael is not there. one point michael was going to make. a lot of these companies, the biggest ones, have never fallen off the cliff. mark talks about ge, not jokingly a lot but it's had a rough decade. it never went off the brink during the crisis. how much upside is left for a microsoft and a ge that never went off the cliff in the first place. >> they didn't go off a cliff and they didn't nearly kiss, you know, $1 a share or $2 a share like some of the big cap banks did. >> but ge was down to 6 and change. >> you know, i'd call that a pretty big fall from grace for a stock like that.
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right now trading 12 times below normal learning level. you have maybe 20% upside in that stock and you don't get opportunities like that in names that have those characters. have good global expansion opportunities and have, you know, a very strong balance sheet. >> all right, m.j., thank you. we apologize for some of the difficulties we had with michael, but we'll have him back. >> oh, yeah. >> he's a regular. >> six in 60 coming up on the other side of the break. still time to vote on the street poll. now that we will doom the dow hitting 11,000 and taking a poll on whether it does by the 31st of march. will we hit dow 11,000. (announcer) we're in the energy business.
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but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron.
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quick reminder to our viewers, of course. you know, it's funny. greece got a debt deal done a couple weeks back, but the crisis there is not yet concluded in any way, shape or form. and a number of headlines coming out today that are certainly worth people at least giving some focus to greek prime minister setting a one-week deadline playing a little brinksmanship for the european union to come to the aid of greece saying, you know, you have to give up your doubts, germany, as the leader of the eu about what is going on here. there seems to be some debate in the eu about whether the imf the monetary fund which we and the japanese are the largest single contributors should be a part of or craft a solution to greece's debt woes. meanwhile, about a month from now, you have greece looking at about 10 billion euros in
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refinancings or at least in april and may adding up to about $14 billion worth of bonds that they want to refinance and they want to do so, of course, to lower interest rates. greek yields have moved up a bit today. we'll keep an eye on things today. a lot of back and forth in the eu, specific to greece and germany, as well. which, we'll just see. but the point is, it's far from done yet. erin, back to you. >> thank you very much, mr. faber. so, the street poll. i don't know how david would have voted. 11,000 by the end of march or not. mark is being very silent on this. >> i think i would vote yes. >> it's been pretty slow and steady. you have to have something sort of strong and dramatic. a catalyst to change the direction. >> well, yeah. to change direction. i think we're just going to grind slowly. so, you know march 31. >> and march 31, i think we
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should notice to your point then you've got april 1st is a thursday, i believe. so you had long weekend, my point is this. if we have a nasty job's number that hurts it, you won't get it until the end of april. so, you're missing that one, you know, potential issue. if it's weak. >> i would vote yes, but no great -- >> what were the full results again? >> 54% said no. 46% said yes. >> sorry, my computer was up. that's pretty evenly. i don't know what that means. if it was really bullish the people would say, get out of it. any bearish, they would say get in. just like the market. >> it's a guessing game. >> all right, they would like us to do six in 60 and i guess it is my turn. so, let's get it started. burger king upgraded to buy at deutch bank. the firm says that things are getting better on the economic front. stocks up 2% and, yes, along with mcdonald's.
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nike upgrade to outperform and that's not why the stock is higher, though. it's higher because the company came out with a 9% increase in orders and a surge in profitability. 84 now up from 67 and athenahealth. >> firm keeping it celebrating on the chipmaker. energizer upgraded to overweight from neutral at jpmorgan. winnebago hosting its first quarterly profit in two years. the rv maker reported a 2 cents per share profit in the second quarter and analysts estimated a 9 cent loss. the company saw an increase in sales in its higher end rvs. >> it did have the buzzer back. united airlines is now offering door-to-door luggage service. for $25 an item the airline will
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ship your luggage overnight via fedex. >> my bag is going to go by fed fedex. >> what they're trying to do. appeal to people like me who refuse to check because it's a nasty, ugly, time-consuming, painful process. they pick up the bag and they send it fedex and when you get on the plane you don't have to deal with baggage claim or checking in. and i guess they pick the bag up from you and do the fedex so you don't have to do that part. i'm assuming. i don't know. >> i, i don't know. that sounds like it could be a good idea. i would have to think about it a little. what is coming up? >> 100 proxies and the highest paid ceos in america so far. >> okay. see you tomorrow. good morning, everyone, welcome to "the call." 90 minutes into the trading day and investors reacting to news from fedex and nike and
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